US markets finish week on a high as S&P passes 1,900

AFP, NEW YORK

US stocks finished a bumpy week on a high note as technology and small-cap equities shook off the blues from recent weeks and led the overall market higher.

The broad-based S&P 500 closed the week on a dramatic note, breaching the 1,900-point mark for the first time to end on 1,900.53. It gained 22.67 points (1.21 percent) over the week, as the Dow Jones Industrial Average advanced 114.96 (0.70 percent) to 16,606.27 and the tech-rich NASDAQ Composite Index rose 95.22 (2.33 percent) to 4,185.81.

Analysts were particularly heartened at the week’s gains by the NASDAQ and the small-cap Russell 2000, which rose 2.1 percent, since weakness in both has weighed on sentiment recently.

“The fact of the matter is we are in a bull market,” Ventura Wealth Management portfolio strategist Tom Cahill said.

Yet Michael James, managing director of equity trading at Wedbush Securities Inc, said trading volumes were extremely light all week ahead of the holiday weekend that will see US markets close tomorrow for Memorial Day.

James said he expects a “very quiet summer,” with low trading volumes causing more volatility.

In a week light in economic indicators, investors focused on the US Federal Reserve and earnings from the retail sector.

On Tuesday, all three indices slumped in part due to comments from Federal Reserve Bank of Philadelphia President Charles Plosser that a strengthening US economic recovery could require the central bank to raise interest rates “sooner rather than later.”

Yet on Wednesday, stocks made up for all the previous day’s losses and then some, after the minutes of the Federal Open Market Committee’s policy meeting last month suggested an earlier-than-expected hike in the federal funds rate was unlikely. The Fed is expected to lift its near-zero rate in the middle of next year.

Home-improvement retailers like Home Depot Inc and Lowe’s Companies Inc impressed with commentary on rising demand for their goods, rising 2.4 percent and 3.7 percent respectively.

Dick’s Sporting Goods Inc finished 16.5 percent lower after slashing its full-year profit forecast from US$3.03 to US$3.08 per share to US$2.70 to US$2.85 due to extremely weak sales for golf and hunting equipment and apparel.